Your car insurance premium, or the amount which you pay an insurance company to get insurance coverage for your car, can be affected by a lot of factors.

Some of these are the make and age of the vehicle, but what also matters is the fuel type of your car.

While there is always a debate on which fuel type is best for a vehicle, each type (petrol, CNG, diesel, etc.) can affect your car insurance premium differently.

Choosing the type of fuel will also affect your car in other ways, like its fuel-efficiency, how much money you would spend on maintaining your car, the impact on the environment, and (of course) the price of fuel itself!

But remember, whether your car runs on diesel, petrol, CNG or is an electric one, it is mandatory to purchase at least a third-party car insurance policy.

So how can the type of fuel your car uses affect your premium*? Let’s take a look:

*Keep in mind that these are generic points and may vary with the make and model of a car.

CNG as a fuel type for cars is gaining popularity as it is both easy on your pocket in the long run and environment friendly too.

In CNG cars, the premium amount is generally increased by Rs. 60, and some additional taxes are added to third-party only policies.

When it comes to a comprehensive policy, it depends whether your CNG kit came with the car or was fitted in later.

Externally installed CNG kit - It is possible to convert your petrol car into a CNG car, but remember to inform your insurer so that your policy can be upgraded. CNG vehicles need higher maintenance along with a high installation cost (a good quality CNG kit can cost around Rs 50,000). So, your own-damage premium will likely increase by 4-5% of the kit value.

Internally fitted CNG kit - Insuring a new pre-fitted CNG vehicle is basically the same as insuring any other type of vehicle (as here the CNG kit comes with the vehicle). Just ensure you mention the fuel type and know that the premium you will get will likely be the highest as compared to the insurance premium of the same car running on either petrol or diesel. 

Essentially, your car insurance premium is affected by what type of fuel you use to run your car as follows:

• Electric: Electric vehicle premiums are much cheaper than those for regular vehicles, at least 15 percent cheaper than regular fuel-based vehicles.
• Petrol: Petrol vehicles are considered a sort-pf default rate and have fairly low premiums.
• Deisel: Car insurance premiums for diesel cars are slightly higher than that of petrol.
• CNG: usually, the premium you will get for CNG cars will be the highest as compared to the that of the same car running on either petrol or diesel.

There will always be debate on which fuel type is the best for your vehicle, so be sure it fulfils all your personal needs (such as CNG being environmentally friendly, or electric cars having the lowest premiums) before you make a choice.